Three Democratic senators push for 1099 reform

By
Felicia Sonmez

Three Democratic senators have penned a letter to House Speaker John Boehner (R-Ohio) pushing for a vote on repealing a provision of the national health care overhaul regarding tax-reporting requirements for businesses.

The unpopular 1099 tax provision, which requires businesses to report to the Internal Revenue Service all purchases of $600 or more, has been panned by members of both parties. Late last year, efforts by Sens. Mike Johanns (R-Neb.) and Max Baucus (D-Mont.) to repeal the provision came up short, and a Democratic-led effort to include 1099 repeal in the tax-cut package was one of several proposed add-ons nixed by Republicans during the lame-duck session.

A repeal measure, H.R. 4, has already been introduced but a vote has not been scheduled. House Republican aides had previously said that they expected it would be taken up shortly after a vote on the full repeal measure, which passed the House Wednesday.

Boehner spokesman Michael Steel said Republican leaders support the 1099 repeal but emphasized that their top priority is repeal of the entire health care law.

"While we support eliminating the 1099 requirement, it is far from the only job-destroying provision in Washington Democrats' law," Steel said. "Now that the House has passed a law to repeal it, the best course would be for the Senate to do the same, and I hope these senators are pressing Senate Majority Leader Reid to do just that."

The full text of the letter to Boehner is after the jump.

January 20, 2011

Dear Speaker Boehner,

Now that you have moved past repeal of the Affordable Care Act, we encourage you to work on efforts to improve the law moving forward. In this spirit, we urge you to take up and pass H.R. 4, a bill which simply strikes the tax-reporting requirement in the health reform law. We have heard from small business men and women in our states who have voiced concern that this provision is burdensome and unnecessary, and could potentially undermine our nation's economic recovery. Repealing this provision would be an important and practical way to improve the Affordable Care Act. We are confident that the Senate can quickly act on H.R. 4 once the House has passed it.

Section 9006 of the Affordable Care Act (P.L. 111-148) requires all business entities to file a 1099 form with the Internal Revenue Service for each vendor for whom they have cumulative transactions of $600 or more. Small businesses in our states have raised concerns that in order to comply with this new requirement, which takes effect next year, businesses will have to institute new record-keeping methods. The change is particularly onerous for small businesses, our nation's engines of growth, who cannot afford to employ extra lawyers and accountants to comply with the new rules. The provision may also have the unintended consequence of distorting behavior in the marketplace, as large businesses will have an incentive to minimize their reporting requirements by consolidating purchases with large vendors, harming small, regional vendors.

This past November, voters sent both parties a clear message: focus on job creation. As President Obama has recently noted, our economy will recover more quickly and create more jobs if we can reduce regulations on business. Repealing this provision would be a great first step as we work together to grow the economy.

If my fellow business owners didn't cheat so much, there would be no need to expand 1009-Misc reporting. But they do cheat -- and as the Congressional Budget Office reported, this provision will bring in $17 billion more. That's a lot of cheating.

I gotta love the anti-regulation folk. Regulations exist because so many of us in the private sector cheat, pure and simple. The deceptive practices within the private sector are astounding and I am amazed that not only does the public let us get away with it, but the Republicans who claim to be for law and order seem to feel it's just fine for businesses to cheat on their taxes and not honestly or accurately report their income.

Now if the private sector would just stop cheating on their taxes... well, I can dream, can't I?

The people who think this requirement is no big deal either work for accounting firms and want more business, sell 1099 forms or have never operated a small business. I spend enough of my time as it is complying with federal and state regulations with no compensation. I have no desire to give them even more of my time for free.

great just what we need;;more dead trees for the paperwork ;;hiring more useless workers to do useless paperwork that only add a higher rate to the product produced;;so we can lose more jobs to 3 rd world countries this is the dam est stupid country in the world !!HOW MANY TIMES DO WE HAVE TO TELL YOU FLAT TAX !!now you are gonna have to hire more useless workers at outragiuos wages ;;w/full benefits after 30 yrs service w/full health care incl dental and eye;;yes gov workers to handle all this paper trails of unnessary paper work;;at a cost to taxpayers of 95 % of their retirement/healthcare cost !!we need jobs that produce not jobs that cut into production;;we dont need any more paper shufflers ;;we dont need more tax accts;;and we sure as heck dont need more useless gov workers !!a flat tax solves all the problems;;it actually saves trees/envior;;save more than you will ever collect since you can cut IRS by 2/3;;its saves because you can get rid of geek/ie accts who need to replace illegals in the feilds ;;a production job not a made up service leaching predator job killing sap suckers !!a win win for all !!

Did I understand the above article correctly? The Republicans want the 1099 provision repealed as well the Democrats but were unwilling to vote for such in the Lame Duck session? What kind of politics is this?

So currently business have to report the income on a 1099 for $600 or more when paying a contractor and so on. That's fine.

The issue is that the new rules would require payments to corporations for $600 or more to also have a 1099 filed. So let's say you have an office you rent -- now you need to file a 1099 on them. Let's say you buy a new computer from a vendor -- 1099. Basically almost _any_ payment > $600 is a 1099 situation.

That's what all the fuss is about. It hinders business if you have to file 1099s even when you go to buy some office furniture from Staples.

This is a joke, small businesses aren't off the hook when it comes to maintaining accurate records. I don't know of a single small business owner that doesn't utilize either an accounting software like Quickbooks or contracts with a CPA to maintain these types of transactional records. And for larger companies, if anything you're employing temp help or even hiring full time labor to assist in fulfilling the reporting side of this additional requirement. Most larger companies have automated the 1099 process anyway. Job-destroying? Please tell me how this does anything but enforce general standards that some businesses are failing to adhere to (cheating) and also lets the govt collect the lost revenue that's currently falling through the cracks?

I don't know exactly why they don't want the 1099 reporting but I suspect (not sure) it relates to small businesses who work off the books so they can hire people and pay cash and save on insurance, social security etc.

I built a house once and did pay a couple of helpers social security etc. It was a pain, but I did it. Some in the neighborhood complained when I did that. "Folks around here, don't do that" they said.

Something like that came up over the Gulf oil spill where some of those applying for payment from BP complained that they couldn't prove that they earned or lost what they were saying because they were paid in cash.

Also, there was a recent 60 Minute show where some auditors didn't bother to audit anything less than 500 dollars so the corrupt company listed numerous entries less than $500 (or was it $5,000) so they wouldn't get caught.

Of course $500 or ($5,000) dollars is a trivial amount to some of the smooth operators.

The Democrats who forced ObamaCare through added this small chunk of regulation to build revenue to help keep cost numbers low.

By just removing this part, the total cost goes up by the amount the tax-reporting requirement would allegedly have brought in.

Given that republicans won the last election in great part due to ObamaCare, unemployment and promising to reign in spending, they'd be foolish to fix this problem by making it easier on business' and more costly to taxpayers.

Better for them, I believe, to send the letter back to Sens. Nelson, Klobuchar and Cantwell with a note thanking them for their valued input and suggesting that they reply to his reply with spending cut suggestions to make up the difference.

If they do, he should thank them and follow their request. If not, they weren't terribly serious.

This isn't rocket science, folks. Just simple math. Partisans on both sides (but at differing times :D ) seem to find "doing the math" almost impossible.

The Democrats who forced ObamaCare through added this small chunk of regulation to build revenue to help keep cost numbers low.

By just removing this part, the total cost goes up by the amount the tax-reporting requirement would allegedly have brought in.

Given that republicans won the last election in great part due to ObamaCare, unemployment and promising to reign in spending, they'd be foolish to fix this problem by making it easier on business' and more costly to taxpayers.

Better for them, I believe, to send the letter back to Sens. Nelson, Klobuchar and Cantwell with a note thanking them for their valued input and suggesting that they reply to his reply with spending cut suggestions to make up the difference.

If they do, he should thank them and follow their request. If not, they weren't terribly serious.

This isn't rocket science, folks. Just simple math. Partisans on both sides (but at differing times :D ) seem to find "doing the math" almost impossible.

Lame Duck RNC Chair Steel echoes the entire problem with the New Teabagger GOP: our way or the highway!

Republicans control the US, but the US is not a parliamentary system. They do not control the Senate or the White House, the other 2 pieces of the legislative process.

Removing the 1099 Requirement is sensible and popular. Instead of embracing bipartisan reforms, Steel and other teabaggers say, "You can have your sensible idea, only if you completely give in to all of our demands!" That way, not only do Republicans not get their way, nothing reasonable gets done, either.

The coming government shut down will test how far Republicans are willing to push in order to get their half-baked agenda done. It's even hard to see what their end game is, since shrinking government does not resolve the myriad of problems facing the US.

In addition to American's right to an attorney, maybe Americans should be guaranteed a right to an accountant.
We cannot have a functioning republic if our laws are written by experts for experts.
When a so-called democratic government performs its duties in the clouds, high above our heads then we, on the ground, are no longer citizens, but rather ants whose anthill is located in the path of a new freeway.
End American "Legalism."

I think the strategy is pretty obvious - deny fixes to the bill so the general public thinks that the entire bill needs to be scrapped. Most people won't realize (and the media isn't likely to make a big deal about it) that the Republicans are blocking the things that could be improved to make a better bill. Of course, if the media DOES make a big deal of it, I'm sure the Republicans will say it was all their idea.

Really very cynical. So much for bi-partisan solutions. Hard to believe, but my opinion of Republicans is sinking lower than it was before.

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